This invention relates generally to systems and methods for processing payment transaction and, more particularly, to systems and methods for automatically updating cardholder payment card expiration information stored by a merchant.
The payment card industry includes payment transactions wherein the transaction is recurring and the payment card is not present for the transactions. These transactions are sometimes referred to as “card-not-present recurring payment” (CNP/RP) transactions. Specifically, CNP/RP transactions are payment transactions that use payment card information stored by a merchant and wherein the payment card is not physically present for the actual transaction. For example, a health club member may wish to avoid mailing a monthly check for club membership dues. The member may instead register a payment card, such as a credit card, a debit card, or a prepaid card, with the club, enabling the health club to automatically charge the payment card for the monthly dues on a particular day each month. In some such systems, the merchant stores an account number, an expiration date, and/or other information associated with the payment card and/or cardholder.
In the event that some or all of the merchant-stored payment card information changes, there is a risk that payment transactions will be denied due to the use of stale and incorrect information. In such a case, the merchant must contact the cardholder in order to update the merchant records, or the cardholder must contact the merchant to report a change in information.
At least some systems enable merchants to submit billing files to a processing center or payment card system in order for the files to be updated with up to date payment card information. The new information is submitted to the processing center by an issuing bank that holds the account associated with the payment card.
None of the known recurring payment systems are capable of updating a merchant upon indication that a cardholder has physically used a card with a new expiration date, known as a “card-present transaction.” Accordingly, a system and method for updating of payment card information stored by a merchant is needed, wherein the updated payment card information is identified and sent to the merchant when a CNP/RP transaction is initiated, thereby reducing or avoiding denied transactions due to stale card data.